Smith and Robersonís Business Law

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SMITH AND ROBERSON'S BUSINESS LAW is an updated classic that features a comprehensive presentation of business law topics, end-of-chapter cases with edited facts and decisions to preserve the language of the court, and topics that reflect AACSB guidelines. This is the most complete and credible business law book available, and has a long tradition of accuracy and comprehensiveness, while keeping up-to-date edition after edition by consistently incorporating the latest issues and topics.

Preface

xiv

Table of Cases

xvii

Table of Illustrations

xxi

PART 1 The Legal Environment of Business

1

(156)

Introduction to Law

2

(12)

Nature of Law

2

(2)

Classification of Law

4

(1)

Sources of Law

5

(4)

Legal Analysis

9

(5)

Chapter Summary

10

(1)

Case

11

(2)

Questions

13

(1)

Business Ethics and the Social Responsibility of Business

14

(23)

Law versus Ethics

15

(1)

Ethical Theories

15

(3)

Ethical Standards in Business

18

(1)

Ethical Responsibilities of Business

19

(7)

Chapter Summary

22

(2)

Cases

24

(1)

Questions

24

(1)

Problems

24

(2)

Business Ethics Cases

26

(11)

Civil Dispute Resolution

37

(25)

The Court System

37

(1)

The Federal Courts

37

(2)

State Courts

39

(1)

Jurisdiction

40

(1)

Subject Matter Jurisdiction

40

(2)

Jurisdiction over the Parties

42

(2)

Civil Dispute Resolution

44

(1)

Civil Procedure

44

(4)

Alternative Dispute Resolution

48

(14)

Chapter Summary

51

(2)

Cases

53

(6)

Questions

59

(1)

Problems

59

(3)

Constitutional Law

62

(22)

Basic Principles of Constitutional Law

63

(1)

Powers of Government

64

(2)

Limitations on Government

66

(18)

Chapter Summary

71

(1)

Cases

72

(10)

Questions

82

(1)

Problems

82

(2)

Administrative Law

84

(15)

Operation of Administrative Agencies

85

(2)

Limits on Administrative Agencies

87

(12)

Chapter Summary

90

(1)

Cases

90

(7)

Questions

97

(1)

Problems

97

(2)

Criminal Law

99

(16)

Nature of Crimes

99

(3)

White-Collar Crime

102

(1)

Crimes Against Business

103

(2)

Defenses to Crimes

105

(1)

Criminal Procedure

105

(10)

Chapter Summary

108

(1)

Cases

109

(3)

Questions

112

(1)

Problems

112

(3)

Intentional Torts

115

(21)

Intent

116

(1)

Harm to the Person

116

(2)

Harm to the Right of Dignity

118

(2)

Harm to Property

120

(1)

Harm to Economic Interests

121

(1)

Defenses to Intentional Torts

122

(14)

Chapter Summary

123

(1)

Cases

124

(8)

Questions

132

(1)

Problems

133

(3)

Negligence and Strict Liability

136

(21)

Negligence

136

(1)

Breach of Duty of Care

137

(4)

Proximate Cause

141

(1)

Injury

142

(1)

Defenses to Negligence

142

(1)

Strict Liability

143

(1)

Activities Giving Rise to Strict Liability

144

(1)

Defenses to Strict Liability

145

(12)

Chapter Summary

146

(1)

Cases

147

(7)

Questions

154

(1)

Problems

155

(2)

PART 2 Contracts

157

(168)

Introduction to Contacts

158

(14)

Development of the Law of Contracts

158

(2)

Definition of a Contract

160

(1)

Requirements of a Contract

160

(1)

Classification of Contracts

161

(2)

Promissory Estoppel

163

(1)

Quasi Contracts

163

(9)

Chapter Summary

164

(1)

Cases

165

(5)

Questions

170

(1)

Problems

170

(2)

Mutual Assent

172

(18)

Offer

172

(1)

Essentials of an Offer

173

(2)

Duration of Offers

175

(2)

Acceptance

177

(1)

Communication of Acceptance

177

(1)

Variant Acceptances

178

(12)

Chapter Summary

180

(1)

Cases

181

(5)

Questions

186

(1)

Problems

187

(3)

Conduct Invalidating Assent

190

(18)

Duress

190

(1)

Undue Influence

191

(1)

Fraud

191

(2)

Nonfraudulent Misrepresentation

193

(1)

Mistake

194

(14)

Chapter Summary

195

(1)

Cases

196

(8)

Questions

204

(1)

Problems

204

(4)

Consideration

208

(17)

Legal Sufficiency

208

(4)

Bargained-For Exchange

212

(1)

Contracts without Consideration

213

(12)

Chapter Summary

214

(2)

Cases

216

(6)

Questions

222

(1)

Problems

222

(3)

Illegal Bargains

225

(14)

Violations of Statutes

225

(2)

Violations of Public Policy

227

(2)

Effect of Illegality

229

(10)

Chapter Summary

230

(1)

Cases

231

(5)

Questions

236

(1)

Problems

236

(3)

Contractual Capacity

239

(14)

Minors

239

(2)

Incompetent Persons

241

(1)

Intoxicated Persons

242

(11)

Chapter Summary

243

(1)

Cases

243

(7)

Questions

250

(1)

Problems

250

(3)

Contracts in Writing

253

(22)

Statute of Frauds

253

(1)

Contracts within the Statute of Frauds

254

(4)

Compliance with the Statute of Frauds

258

(1)

Effect of Noncompliance

259

(1)

Parol Evidence Rule

260

(1)

The Rule

260

(1)

Situations to Which the Rule Does Not Apply

260

(1)

Supplemental Evidence

261

(1)

Interpretation of Contracts

261

(14)

Chapter Summary

263

(2)

Cases

265

(6)

Questions

271

(1)

Problems

271

(4)

Third Parties to Contracts

275

(16)

Assignment of Rights

275

(3)

Delegation of Duties

278

(1)

Third-Party Beneficiary Contracts

279

(12)

Chapter Summary

281

(1)

Cases

282

(6)

Questions

288

(1)

Problems

288

(3)

Performance, Breach, and Discharge

291

(15)

Conditions

291

(2)

Discharge by Performance

293

(1)

Discharge by Breach

293

(1)

Discharge by Agreement of the Parties

294

(1)

Discharge by Operation of Law

295

(11)

Chapter Summary

297

(1)

Cases

298

(5)

Questions

303

(1)

Problems

303

(3)

Contract Remedies

306

(19)

Interests Protected by Contract Remedies

306

(1)

Monetary Damages

306

(4)

Remedies in Equity

310

(1)

Restitution

311

(1)

Limitations on Remedies

312

(13)

Chapter Summary

313

(1)

Cases

314

(8)

Questions

322

(1)

Problems

322

(3)

PART 3 Agency

325

(44)

Relationship of Principal and Agent

326

(21)

Nature of Agency

326

(1)

Creation of Agency

327

(2)

Duties of Agent to Principal

329

(1)

Duties of Principal to Agent

330

(2)

Termination of Agency

332

(15)

Chapter Summary

334

(1)

Cases

335

(9)

Questions

344

(1)

Problems

344

(3)

Relationship with Third Parties

347

(22)

Relationship of Principal and Third Persons

347

(1)

Contract Liability of the Principal

347

(6)

Tort Liability of the Principal

353

(3)

Criminal Liability of the Principal

356

(1)

Relationship of Agent and Third Persons

356

(1)

Contract Liability of Agent

356

(2)

Tort of Liability of Agent

358

(1)

Rights of Agent Against Third Person

358

(11)

Chapter Summary

358

(2)

Cases

360

(6)

Questions

366

(1)

Problems

366

(3)

PART 4 Sales

369

(112)

Introduction to Sales and Leases

370

(22)

Nature of Sales and Leases

371

(1)

Definitions

371

(2)

Fundamental Principles of Article 2 and Article 2A

373

(2)

Formation of Sales and Lease Contracts

375

(1)

Manifestation of Mutual Assent

375

(4)

Consideration

379

(1)

Form of the Contract

379

(13)

Chapter Summary

381

(2)

Cases

383

(6)

Questions

389

(1)

Problems

389

(3)

Performance

392

(21)

Performance by the Seller

392

(5)

Performance by the Buyer

397

(2)

Obligations of Both Parties

399

(14)

Chapter Summary

402

(1)

Cases

403

(6)

Questions

409

(1)

Problems

409

(4)

Transfer of Title and Risk of Loss

413

(19)

Transfer of Title

413

(4)

Risk of Loss

417

(3)

Sales of Goods in Bulk

420

(12)

Chapter Summary

422

(1)

Cases

423

(6)

Questions

429

(1)

Problems

429

(3)

Products Liability: Warranties and Strict Liability in Tort

432

(27)

Warranties

432

(1)

Types of Warranties

433

(2)

Obstacles to Warranty Actions

435

(3)

Strict Liability in Tort

438

(1)

Requirements of Strict Liability

439

(2)

Obstacles to Recovery

441

(2)

Restatements of Torts (Third): Products Liability

443

(16)

Chapter Summary

444

(2)

Cases

446

(9)

Questions

455

(1)

Problems

455

(4)

Sales Remedies

459

(22)

Remedies of the Seller

460

(3)

Remedies of the Buyer

463

(4)

Contractual Provisions Affecting Remedies

467

(14)

Chapter Summary

469

(2)

Cases

471

(7)

Questions

478

(1)

Problems

478

(3)

PART 5 Negotiable Instruments

481

(94)

Form and Content

482

(15)

Negotiability

483

(1)

Types of Negotiable Instruments

484

(1)

Formal Requirements of Negotiable Instruments

485

(12)

Chapter Summary

490

(1)

Cases

491

(3)

Questions

494

(1)

Problems

494

(3)

Transfer

497

(16)

Negotiation

497

(3)

Indorsements

500

(13)

Chapter Summary

503

(1)

Cases

504

(6)

Questions

510

(1)

Problems

510

(3)

Holder in Due Course

513

(21)

Requirements of a Holder in Due Course

513

(5)

Holder in Due Course Status

518

(1)

The Preferred Position of a Holder in Due Course

518

(4)

Limitations Upon Holder in Due Course Rights

522

(12)

Chapter Summary

523

(1)

Cases

524

(7)

Questions

531

(1)

Problems

531

(3)

Liability of Parties

534

(20)

Contractual Liability

534

(1)

Signature

535

(1)

Liability of Primary Parties

535

(1)

Liability of Secondary Parties

536

(3)

Termination of Liability

539

(1)

Liability Based on Warranty

540

(1)

Warranties on Transfer

540

(1)

Warranties on Presentment

541

(13)

Chapter Summary

543

(2)

Cases

545

(7)

Questions

552

(1)

Problems

552

(2)

Bank Deposits, Collections, and Funds Transfers

554

(21)

Bank Deposits and Collections

554

(1)

Collection of Items

555

(3)

Relationship Between Payor Bank and Its Customer

558

(2)

Electronic Funds Transfers

560

(1)

Types of Electronic Funds Transfers

560

(1)

Consumer Funds Transfers

561

(1)

Wholesale Funds Transfers

562

(13)

Chapter Summary

564

(2)

Cases

566

(6)

Questions

572

(1)

Problems

572

(3)

PART 6 Unincorporated Business Associations

575

(70)

Formation and Internal Relations of General Partnerships

576

(21)

Choosing a Business Association

576

(1)

Factors Affecting the Choice

577

(1)

Forms of Business Associations

578

(2)

Formation of General Partnerships

580

(1)

Nature of Partnership

580

(1)

Formation of a Partnership

581

(3)

Relationships Among Partners

584

(1)

Duties Among Partners

584

(2)

Rights Among Partners

586

(11)

Chapter Summary

589

(2)

Cases

591

(3)

Questions

594

(1)

Problems

595

(2)

Operation and Dissolution of General Partnerships

597

(27)

Relationship of Partnership and Partners with Third Parties

597

(1)

Contracts of Partnership

597

(3)

Torts and Crimes of Partnership

600

(1)

Notice to a Partner

601

(1)

Liability of Incoming Partner

601

(1)

Dissociation and Dissolution of General Partnerships under RUPA

601

(1)

Dissociation

601

(1)

Dissolution

602

(2)

Dissociation without Dissolution

604

(2)

Dissolution of General Partnerships under UPA

606

(1)

Dissolution

606

(1)

Winding Up

607

(1)

Continuation after Dissolution

608

(16)

Chapter Summary

609

(2)

Cases

611

(9)

Questions

620

(1)

Problems

620

(4)

Limited Partnerships and Limited Liability Companies

624

(21)

Limited Partnerships

624

(5)

Limited Liability Companies

629

(3)

Other Types of Unincorporated Business Associations

632

(13)

Chapter Summary

634

(3)

Cases

637

(5)

Questions

642

(1)

Problems

642

(3)

PART 7 Corporations

645

(94)

Nature, Formation, and Powers

646

(24)

Nature of Corporations

647

(1)

Corporate Attributes

647

(1)

Classification of Corporations

648

(2)

Formation of a Corporation

650

(1)

Organizing the Corporation

650

(1)

Formalities of Incorporation

651

(1)

Recognition or Disregard of Corporateness

652

(2)

Defective Incorporation

654

(1)

Piercing the Corporate Veil

655

(1)

Corporate Powers

656

(1)

Sources of Corporate Powers

656

(1)

Ultra Vires Acts

657

(1)

Liability for Torts and Crimes

657

(13)

Chapter Summary

657

(3)

Cases

660

(7)

Questions

667

(1)

Problems

667

(3)

Financial Structure

670

(21)

Debt Securities

671

(1)

Authority to Use Debt Securities

671

(1)

Types of Debt Securities

671

(1)

Equity Securities

671

(1)

Issuance of Shares

672

(2)

Classes of Shares

674

(2)

Dividends and Other Distributions

676

(1)

Types of Dividends and Other Distributions

676

(1)

Legal Restrictions on Dividends and Other Distributions

677

(2)

Declaration and Payment of Distributions

679

(1)

Liability for Improper Dividends and Distributions

679

(12)

Chapter Summary

680

(2)

Cases

682

(6)

Questions

688

(1)

Problems

688

(3)

Management Structure

691

(31)

Corporate Governance

691

(2)

Role of Shareholders

693

(1)

Voting Rights of Shareholders

694

(3)

Enforcement Rights of Shareholders

697

(1)

Role of Directors and Officers

698

(1)

Function of the Board of Directors

699

(1)

Election and Tenure of Directors

700

(1)

Exercise of Directors' Functions

700

(1)

Officers

701

(1)

Duties of Directors and Officers

702

(20)

Chapter Summary

706

(1)

Cases

707

(11)

Questions

718

(1)

Problems

719

(3)

Fundamental Changes

722

(17)

Charter Amendments

722

(1)

Combinations

723

(3)

Dissolution

726

(13)

Chapter Summary

728

(1)

Cases

729

(8)

Questions

737

(1)

Problems

737

(2)

PART 8 Debtor and Creditor Relations

739

(58)

Secured Transactions and Suretyship

740

(32)

Secured Transactions in Personal Property

740

(1)

Essentials of Secured Transactions

741

(1)

Classification of Collateral

741

(2)

Attachment

743

(2)

Perfection

745

(4)

Priorities Among Competing Interests

749

(4)

Default

753

(2)

Suretyship

755

(1)

Nature and Formation

755

(2)

Rights of Surety

757

(1)

Defenses of Surety and Principal Debtor

758

(14)

Chapter Summary

759

(4)

Cases

763

(5)

Questions

768

(1)

Problems

769

(3)

Bankruptcy

772

(25)

Federal Bankruptcy Law

772

(1)

Case Administration---Chapter 3

773

(1)

Creditors, the Debtor, and the Estate---Chapter 5

774

(5)

Liquidation---Chapter 7

779

(2)

Reorganization---Chapter 11

781

(2)

Adjustment of Debts of Individuals---Chapter 13

783

(1)

Creditors' Rights and Debtor's Relief Outside of Bankruptcy

784

(1)

Creditors' Rights

784

(1)

Debtor's Relief

785

(12)

Chapter Summary

786

(2)

Cases

788

(6)

Questions

794

(1)

Problems

794

(3)

PART 9 Regulation of Business

797

(206)

Protection of Intellectual Property

798

(20)

Trade Secrets

798

(1)

Trade Symbols

799

(3)

Trade Names

802

(1)

Copyrights

802

(2)

Patents

804

(14)

Chapter Summary

806

(1)

Cases

807

(8)

Questions

815

(1)

Problems

815

(3)

Antitrust

818

(23)

Sherman Act

818

(5)

Clayton Act

823

(2)

Robinson-Patman Act

825

(1)

Federal Trade Commission Act

826

(15)

Chapter Summary

828

(1)

Cases

829

(8)

Questions

837

(1)

Problems

837

(4)

Consumer Protection

841

(26)

State and Federal Consumer Protection Agencies

841

(3)

Consumer Purchases

844

(3)

Consumer Credit Transactions

847

(4)

Creditors' Remedies

851

(16)

Chapter Summary

852

(2)

Cases

854

(10)

Questions

864

(1)

Problems

864

(3)

Employment Law

867

(29)

Labor Law

867

(2)

Employment Discrimination Law

869

(5)

Employee Protection

874

(22)

Chapter Summary

879

(1)

Cases

880

(12)

Questions

892

(1)

Problems

893

(3)

Securities Regulation

896

(30)

Securities Act of 1933

897

(1)

Definition of a Security

897

(1)

Registration of Securities

898

(1)

Exempt Securities

899

(1)

Exempt Transactions for Issuers

900

(3)

Exempt Transactions for Non-issuers

903

(1)

Liability

903

(2)

Securities Exchange Act of 1934

905

(1)

Disclosure

906

(3)

Liability

909

(17)

Chapter Summary

914

(2)

Cases

916

(7)

Questions

923

(1)

Problems

923

(3)

Accountants' Legal Liability

926

(12)

Common Law

926

(3)

Federal Securities Law

929

(9)

Chapter Summary

931

(2)

Cases

933

(3)

Questions

936

(1)

Problems

936

(2)

Environmental Law

938

(22)

Common Law Actions for Environmental Damage

938

(1)

Nuisance

938

(1)

Trespass to Land

939

(1)

Strict Liability for Abnormally Dangerous Activities

939

(1)

Problems Common to Private Causes of Action

939

(1)

Federal Regulation of the Environment

939

(1)

The National Environmental Policy Act

940

(1)

The Clean Air Act

941

(2)

The Clean Water Act

943

(1)

Hazardous Substances

944

(4)

International Protection of the Ozone Layer

948

(12)

Chapter Summary

948

(2)

Cases

950

(7)

Questions

957

(1)

Problems

958

(2)

International Business Law

960

(17)

The International Environment

960

(2)

Jurisdiction over Actions of Foreign Governments

962

(1)

Transacting Business Abroad

963

(3)

Forms of Multinational Enterprises

966

(11)

Chapter Summary

967

(2)

Cases

969

(5)

Questions

974

(1)

Problems

974

(3)

Cyber Law

977

(26)

Defamation

977

(1)

Intellectual Property

978

(4)

Contracts and Sales

982

(2)

Privacy and the Internet

984

(2)

Securities Regulation

986

(1)

Cybercrime

987

(16)

Chapter Summary

988

(2)

Cases

990

(11)

Questions

1001

(1)

Problems

1001

(2)

PART 10 Property

1003

Introduction to Property, Property Insurance, Bailments, and Documents of Title